Yinglump: Govt To Go Ahead With Policies

[Flashermac]

The government will implement all promised policies but their implementation will be strictly under fiscal discipline guidelines, Prime Minister Yinglunk Shinawatra said on Tuesday.

 

In the meantime, the government will gradually reduce dependence on the export sector in boosting the economy in preparation for possible impacts from the economic crises in Europe and the US, she said.

 

Asked about the proposal by the business sector that the government should establish a support fund to buy oversold stocks when a fluctuation in the capital market occurs, Ms Yinglunk said she would wait to see what happens.

 

If the debt crisis in Europe were to be settled, it would be good for the global economy.

 

The sharp drop of the Thai stock market on Monday might be caused by investor panic due fueled by concerns over the fragile US economy and euro-zone debt crisis. The government would work to rapidly restore the confidence of the private sector and investors, the prime minister said.

 

The Federation of Thai Capital Market Organisations (Fetco) has suggested that the government set up a state-owned support fund similar to the Finance Ministry’s Vayupak Fund to help ease volatility from panic selling.

 

In addition, the government should reset the priorities of its economic policies to catch up with the global economic situation, and the Bank of Thailand should delay any increase in the repurchase rate to curb inflation, Fetco advised.

 

The government should also reconsider raising the daily minimum wage and entry-level salaries for new university graduates as the plan would hike business expenses and could lead to layoffs and slower new recruitment, Fetco said.

 

Fetco also suggested the government accelerate infrastructure investment, adopt incentives to help boost private investment and move forward with plans to cut corporate tax to strengthen private sector competitiveness.

 

Earlier today, Paiboon Narintarangkul, the Fetco chairman, said the government should review its economic policies and reset priorities in order to catch up with the global economic situation.

 

The government’s economic stimulus measures were mapped out six months ago, when the global economy had fewer risk factors, he said.

 

 

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